The New Zealand aerospace firm planning to launch a rocket to carry satellites into low earth orbit for a fraction of the cost of competitors has the backing of a Silicon Valley venture capital fund keen to build the company into a niche leader in the space race.

Khosla Ventures was revealed as the principal backer of Auckland company Rocket Lab which yesterday unveiled a prototype of its Electron carbon composite rocket, which it aims to launch next year.

Rocket Lab has some way to go before it can blast off - it has to find a launch site in New Zealand, patent its engine technology and build the final vehicle.

Founder Peter Beck said he was confident of making next year's deadline, but was not prepared to give a firm date.

"We like to over-deliver," he said after the unveiling of the Electron at simultaneous events in Auckland and the United States.

The materials in the fuselage and fuel tanks of the rocket are similar to those in fuel-efficient airliners - light and strong.

Beck said this meant his vehicle could be much smaller and lighter than those of competitors.

The fund was started by the billionaire co-founder of Sun Microsystems, Vinod Khosla, who is worth $1.7 billion, according to Forbes.

Strohband - who said the Khosla fund had $3.4 billion under management - has high hopes for the New Zealand rocket company.

"We invest in very young companies and try to build very large companies at the end of it," he said.

According to its website Khosla also supports the New Zealand-founded bio-fuel company LanzaTech.

Strohband said Rocket Lab could start a revolution.

"If you wanted to get into space you had to ride-share with the big boys, go wherever they wanted to go and when they wanted to go," he explained.

Beck said Rocket Lab hoped to more than double its staff of 25.

"Our vision at Rocket Lab is to make space commercially viable and more accessible than ever before, doing what the Ford Model T did for consumer automobiles," Beck said. "This technology will really open space for business."

Electron could be launched from a site the size of a rugby field. The site required a northeasterly aspect and had to be clear of populated areas.

He said there was a shortlist of possible locations for a space port, and any regions interested in hosting the facility should get in touch.

Rocket Lab has successfully launched smaller vehicles from New Zealand sites, including one which flew to an altitude of 100km.